Effectively Managing Today’s Liquid Workforce

Get the most out of an increasingly diverse and agile array of work arrangements

     

The rapidly fluctuating business environment has led to the development of a fluid workforce that can respond to the changing business needs in a more effective way. In recent years, HR experts have increasingly adopted the term “liquid workforce” to describe the most adaptable segments of the labor force. This has led to numerous questions from, “What exactly is it?” to “How can we optimally manage it?”

To help answer these and other questions, HR.com partnered with Sense, the provider of a smart engagement platform that provides temporary staffing solutions, to gain a better understanding of the liquid workforce through a survey.

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The “liquid workforce” is composed of a variety of workers, often including one or more of the following types: temporary, freelancers/independent contractors, volunteers, consultants and part-time. The liquid workforce is often seen as part of the so-called gig economy, the system in which temporary positions are common as organizations contract with contingent workers for short-term, flexible engagements.

Today, there is uncertainty about exactly how quickly the liquid workforce is growing. This uncertainty especially applies to contingent employees. 

Some liquid work arrangements are used more than others. As shown below, over two-fifths (45%) use “deskless” workers to a very high, high and moderate degree. For the purposes of this study, such workers are defined as those who do not sit at a desk to get their work done. Deskless workers can, of course, be full-time, part-time or contingent.

Organizations use a range of contingent employees, including temporary workers from staffing agencies (30%), freelancers/independent contractors (39%) and consultants (40%). Two-fifths also rely on part-time employees to at least a moderate degree. By comparison, just 15% of organizations use volunteers to a very high, high and moderate degree. Non-profit industries and others with philanthropic events often rely on volunteer staff to support their missions.

Survey Question: To what degree does your organization rely on the following groups?
 

Only two-fifths (39%) of HR professionals say they excel at managing part-time employees, and they are not as effective at managing consultants (30%), temporary workers from staffing firms (23%), freelancers and independent contractors (22%) and volunteers (14%). Part-time employees tend to be somewhat easier to manage than other categories. This is likely because managers generally have greater control over where and how their employees work. Moreover, part-time positions are often managed similarly to full-time roles, giving managers greater experience at managing such roles.

Nearly four-fifths (89%) of HR professionals think the liquid workforce helps an organization be more agile and flexible. One reason for this is that most businesses have experienced seasonality (e.g., the need for extra accountants during tax season) or economic cyclicality during their tenure. Having a flexible workforce helps manage those peaks and valleys. Agility is also key for organizations that need to adjust to new competition, technologies, and markets. In some cases, organizations that need new expert talent can quickly find it via staffing firms, consultants, freelancers.

Contingent workers represent what may be the largest subset of the liquid workforce. They include temporary workers from staffing agencies, contractors, freelancers, and consultants. Contingent workers are used for a variety of reasons. The top two reasons are increased flexibility (44%) and reduced cost (38%). Organizations also rely on contingent workers to boost skill levels where needed (36%) and improve the speed of hiring (19%).

Given the various advantages associated with contingent employees, what keeps organizations from hiring more of them? Over half of HR professionals indicate that they will not hire more contingent staff because “we need to retain, long-term qualified skilled employees” (55%) and two-fifths indicate “our business requires skill sets that require a long time to hone” (44%).

About half (47%) of HR professionals say they do not pursue more contingent workers because “we need long-term employees who understand our culture.” This is somewhat surprising given that organizations should always be screening for cultural fit.

While nearly two-thirds (63%) of HR professionals strongly agree or agree that their organization is good at tracking contingent hours worked, only about two-fifths (44%) think they are good at managing the performance of those workers.

One reason why it is hard to manage the performance of contingent workers is that many managers do not communicate well (45%) with contingent workers, possibly due to the lack of onboarding, feedback or pertinent job-related materials. Because some contingent workers are added at the last minute to fill overflow/seasonal needs, managers do not always have the time for proper communication. In fact, only two-fifths (39%) report “our contingent workers always get key updates.”

Survey Question: To what degree do you agree with the following statements?

Percent Responding Agree/Strongly Agree
 

More than half (53%) of HR professionals indicate their organization contracts with one or more staffing agencies for labor. Businesses often turn to staffing agencies to fill temporary positions.

When organizations were asked to indicate the areas staffing agencies helped with most, the greatest benefit was found to be improving time-to-fill (73%). This highlights the need for speed in many organizations. But what about the quality of those employees? Over half (56%) also agreed that staffing agencies can provide highly skilled talent on demand, suggesting that agencies may increasingly be good resources for finding scarce talent in today’s renewed “war for talent.”

Significantly fewer participants (36%) agree that staffing agencies are a cost-effective alternative to hiring full-time staff on their own. With respect to measurement, only about one-fifth (18%) report staffing agencies provide excellent analytics. 

Cost is a major focus for most respondents when selecting staffing agencies. Nearly four-fifths (77%) say they evaluate rates and fees. Fewer, but still a majority, of HR professionals, focus on quality metrics such as quality of agency personnel (65%), the types of staffing services provided (60%), and the selection and screening process (54%).

Somewhat surprisingly, less than one-third (30%) have a solid understanding of how the agency will handle potentially poor placements. Just over two-thirds (64%) use agencies for their industry specialization/expertise.

More than half (56%) of HR professionals think general tracking technologies, which often help to better align labor demand with supply, will become increasingly important.

About half of the organizations think assessment technologies (53%) and security-focused technologies (50%) will become increasingly important. As the liquid workforce increases and becomes more dependent on quality personnel, assessments also become more important. So far, however, only a small percentage (12%) expect mixed-reality technologies to be important to the management of the liquid workforce. That said, such technologies may eventually become key for contingent workers who can get “up to speed” quickly with technologies that enable them to learn new processes more quickly.

A majority of HR professionals (56%) think the liquid workforce is a mixed blessing with both advantages and disadvantages. Just a small percentage (8%) thinks the liquid workforce is a completely negative option that reduces wages, benefits and increases uncertainty. 

To learn more and to take home key tactical and strategic takeaways on how organizations might become more successful in acquiring and managing a high-performing liquid workforce, we invite you to download and read the complete research report here: